India’s economy is projected to expand by 7.1-7.3% in FY 2026-27, supported by improving prospects for private investment, according to Deloitte India’s latest Economic Outlook report.
The consultancy expects growth to moderate to 6.6-7% in FY 2027-28, while cautioning that geopolitical uncertainty, fluctuating energy prices and disruptions to international trade could affect economic performance.
Deloitte said India’s economic expansion over the past decade had largely depended on household consumption and sustained government investment in infrastructure.
However, improved business conditions could now encourage companies to increase capital expenditure and contribute more significantly to growth.
Private Investment In Recovery Mode
The report highlighted stronger corporate balance sheets, improved connectivity and higher capacity utilisation as factors supporting fresh investment.
Gross fixed capital formation, which expanded 11.9% during the first quarter of FY27, marked its fastest growth in four years.
According to Deloitte, sustained private investment could strengthen domestic demand while expanding the country’s productive capacity.
The report suggested that improved infrastructure and financial conditions had created opportunities for businesses to undertake new projects.
However, the pace of investment recovery will depend on companies’ confidence in planning, financing and implementing expansion programmes.
Deloitte’s FY27 forecast is broadly aligned with projections from major economic institutions.
The Reserve Bank of India (RBI) and Organisation for Economic Co-operation and Development (OECD) estimate 7.1% growth.
Meanwhile, the International Monetary Fund (IMF), Asian Development Bank (ADB), S&P Global Ratings and Moody’s project growth of 7%.
Semiconductors, AI Infra To Support Investment
Deloitte expects investment in emerging and strategic industries to contribute to private capital expenditure.
These include semiconductors, electronics, defence manufacturing, clean energy and artificial intelligence (AI) infrastructure.
The report maintained that stronger private sector participation could complement public infrastructure spending and household consumption.
At the same time, external uncertainties, particularly geopolitical developments, energy market volatility and trade disruptions, could constrain India’s growth trajectory.